IDEAS home Printed from https://ideas.repec.org/p/trb/wpaper/2001.08.html
   My bibliography  Save this paper

Revaluations and Capital Gains in the Context of Natural Resource Accounting

Author

Listed:
  • Michael Harris

    () (School of Economics, La Trobe University)

Abstract

Tension exists between national accounting practice (in which capital gains are not counted as part of national income), and the theory of national income definition and interpretation (in which capital gains are often argued to be a component of national income). Much of this theoretical work arises in the context of research into natural resource accounting, where capital gains arise endogenously as natural assets are depleted. In this paper, the appropriate treatment of capital gains in a variety of circumstances is presented. I argue that views on the inclusion (or not) of capital gains are contingent on the underlying interpretation being applied to national income. Capital gains matter when income is interpreted in sustainability terms, rather than in its traditional guise as a measure of the value of output. Even when income is given a sustainability-related interpretation, different views on gains arise from different presumptions regarding the type of gain (the source of the asset price change). Further disagreements in the literature are shown to turn on the time perspective adopted by the individual analyst. The measurement of capital gains varies with the adoption of a present-value versus a current-value perspective. Using this insight, I resolve a number of conflicting claims in the literature. I also raise the neglected issue of revaluations arising from obsolescence, something hitherto neglected in the context of natural resource accounting.

Suggested Citation

  • Michael Harris, 2001. "Revaluations and Capital Gains in the Context of Natural Resource Accounting," Working Papers 2001.08, School of Economics, La Trobe University.
  • Handle: RePEc:trb:wpaper:2001.08
    as

    Download full text from publisher

    File URL: http://www.latrobe.edu.au/__data/assets/pdf_file/0003/130881/2001.08.pdf
    File Function: First version, 2001.08.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Dan Usher, 1973. "The Measurement of Economic Growth," Working Papers 145, Queen's University, Department of Economics.
    2. Asheim, Geir B., 1996. "Capital gains and net national product in open economies," Journal of Public Economics, Elsevier, vol. 59(3), pages 419-434, March.
    3. Common, Mick & Sanyal, Kali, 1998. "Measuring the depreciation of Australia's non-renewable resources: a cautionary tale," Ecological Economics, Elsevier, vol. 26(1), pages 23-30, July.
    4. Asheim, Geir B, 1994. " Net National Product as an Indicator of Sustainability," Scandinavian Journal of Economics, Wiley Blackwell, vol. 96(2), pages 257-265.
    5. Vincent, Jeffrey R. & Panayotou, Theodore & Hartwick, John M., 1997. "Resource Depletion and Sustainability in Small Open Economies," Journal of Environmental Economics and Management, Elsevier, vol. 33(3), pages 274-286, July.
    6. T.K. Rymes., 1992. "Some Theoretical Problems in Accounting for Sustainnable Consumption," Carleton Economic Papers 92-02, Carleton University, Department of Economics, revised 1993.
    7. Kjell Arne Brekke, 1997. "Hicksian Income from Resource Extraction in an Open Economy," Land Economics, University of Wisconsin Press, vol. 73(4), pages 516-527.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:trb:wpaper:2001.08. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stephen Scoglio). General contact details of provider: http://edirc.repec.org/data/sblatau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.